On December 19, 2016, the United States District Court for the Southern District of Florida entered a Stipulated Order for Permanent Injunction and Monetary Judgment to resolve all matters in dispute in the case of Federal Trade Commission and State of Florida v. Inbound Call Experts, LLC et al. after the parties reached a negotiated settlement that includes payment by the defendants of $10 million for consumer redress. The complaint alleged that the defendants "operate a massive Internet-based scheme in which they lure consumers, many of whom are senior citizens, to call an inbound call center and then dupe consumers into purchasing computer technical support services and unnecessary computer security software." According to the complaint, the defendants scared consumers into believing that their computers were in imminent danger of threats like spyware and viruses in order to sell products that cost between $150 and $500, to fix non-existent computer problems. The corporate defendants are Inbound Call Experts LLC, Advanced Tech Supportco LLC, PC Vitalware LLC, and Super PC Support LLC, and the individual defendants are Robert D. Deignan, Paul M. Herdsman, and Justin M. Wright.
A negotiated settlement with the lead generator defendants was announced in July 2016. With the entry of the stipulated order, the case is now resolved. The order prohibits the defendants from misrepresenting that they have identified performance or security problems on consumers' computers and from making any other misrepresentations to induce a consumer to buy a product or service. A monitor has been appointed to oversee the defendants' business for two years, at the defendants' expense. The monitor's duties include reviewing consumer complaints at least monthly, investigating the marketing practices of at least one lead generator defendant before submitting each of the monitor's reports, visiting defendants' business premises at least monthly to meet with defendants and interview employees, and personally observing live sales calls at least monthly. In addition, the order requires the defendants to review the business practices of any third-party lead generators from whom they get leads and to terminate their business relationship with any lead generators that engage in misrepresentations.
To fund the $10 million redress judgment, the order requires the defendants to transfer $5.75 million of their assets to the FTC within seven days of the date the order is entered and to transfer an additional $2.25 million within 30 days. The court-appointed receiver will promptly transfer another $2 million of defendants' assets to the FTC.
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